Or is there a case for taking a more blended approach?
The ongoing development of monetary values as a way to represent social impact is exciting. Procurement teams across the country have access to a wide variety of datasets and frameworks to accurately measure and quantify their impact on society.
However, it seems social impact is only ever seen through its associated frameworks that incorporate monetary values. But this shouldn’t be the case.
A common way to consider our social impact is as the change that happens for – or to – people as a result of an action or activity. It isn’t simply the monetary values attributed to particular activities and reported on as a financial total. In fact, to view it this way can be largely reductive and diminishing of the tangible, real-world impact our efforts can have.
The use of monetary values or financial proxies in social value reporting has its strengths, for sure. The most important being the ability to easily quantify the social impact being created, which helps to draw more attention to the great work organisations are doing. It allows people to understand the importance of social value, positioning it not as something ‘fluffy’ and nice to have, but instead something meaningful and essential.
However, we rarely consider and discuss the limitations of solely using monetary values to showcase our social value. Here’s where we think it falls short.
#1 – It’s unrepresentative
Representation is incredibly important across all facets of society and is a key part of social value. Social value proxies are developed from average amounts for average people.
“A focus on ‘averages’ ignores the complexities and possible struggles of various geographic locations, disabilities, backgrounds, genders, and races.”
This means we’re unable to measure the changes experienced by certain individuals, meaning we miss out on valuable insight regarding their unique and important experience. As such, monetary values should strive to not overlook fuller representation.
#2 – A risk of over-claiming
Unfortunately, over-claiming is pretty common within the social value space. It’s all too easy for organisations and suppliers to misinterpret frameworks and methodologies, leading to unintentionally bolstering their claims.
With no existing benchmarking or ‘best practice’ in this space, we can run the risk of publishing unreliable results, as organisations share figures that aren’t actually representative of the value delivered.
#3 – Negative intentions
The sole use of monetary figures in social value reporting can encourage organisations to ‘chase the money’. Instead of prioritising the projects and services a local community could actually benefit from, organisations can end up focusing time and resources on projects that promise the greatest return on investment and social value figure.
For example, in the past, we’ve seen organisations stop coordinating coffee mornings for residents because there was no value to “measure” its impact.
Social impact should be considered on a case-by-case basis. And it’s the impact, rather than the corresponding monetary value, that’s most important.
Arguably, this desire to chase the money is understandable. Everyone wants recognition for the great work they do and the social value space is becoming ever more competitive. Organisations are increasingly being held accountable for the impact they have and are required to account for the good they do and hit ever-increasing targets.
However, monetary values should not be the only motivation. Qualitative processes such as Theory of Change can help you identify which projects would be most valuable for your communities, irrespective of ROI, especially if stakeholders’ opinions are incorporated into the decision-making process.
#4 – It can be limiting
The range of social value proxies is still somewhat limited. As a result, plenty of projects, interventions, and services that are creating significant amounts of social ‘good’ are being left on the sidelines. They don’t neatly fit into existing frameworks and their associated datasets, and they end up overlooked entirely.
Alternatively, people force a particular value to fit their project and end up with incorrect figures and inaccurate reports.
This doesn’t mean these projects don’t contribute to significant social value, but rather there’s no quick and easy way to measure them using financial proxies. Other organisations who can reflect their social value through monetary values gain recognition, funding, and support, while those who struggle risk being left behind.
Financial proxies often overlook smaller, more niche grassroots organisations. But how can we determine what is more valuable when everyone’s efforts can’t be equally measured? And how do we help these smaller organisations get the recognition they need?
#5 – We can end up overlooking the details
Monetary values will often overshadow the human-level stories of what really happened during a project.
Monetary values let us quantify the significance of our social good, but fail to incorporate the real meaning behind the figures – what has actually happened for people and what it means to them.
It’s easy to say hiring X number of people creates Y amount of social value, but what does that really mean for the people involved? It’s only by incorporating qualitative methods and measures into the mix that we can give social value reports more authenticity. For example, by using case study and survey functionality.
What’s the alternative?
Now, all this isn’t to say that using financial proxies is wrong or bad. After all, it’s through monetary representations of social outcomes that we can better appreciate the value of our projects and interventions. However, we should always keep in mind that monetary values are not the be all and end all of social value reporting.
That’s why, at Impact, we empower our clients to take a blended approach to their social value reporting – harnessing both qualitative and quantitative data.
Encompassing a blended approach ensures the organisations we work with can capture the bigger picture of their efforts. That they can extract the true depth and meaning of their efforts, weaving tangible, real-world outcomes into their social value and progress reporting. It helps give a voice to those who have been most impacted by projects and initiatives.
It also supports organisations who can’t necessarily fit into the readily available values, levelling the playing field for organisations of all sizes and social value maturity. This is especially true in areas like public procurement, where the government is actively trying to close the gap between large organisations, SMEs, and VCSEs throughout the tendering process.
Monetary value has its place in assessing social impact, but if you narrow your focus only to that, you miss the forest for the trees. By taking a wider approach, you can create a true, full picture of what you’re accomplishing, and work towards pushing what you’re already achieving.
If you feel like you’re missing out on valuable qualitative impact data, Impact can help. We empower organisations just like yours to move past monetary figures and take a more blended approach to social value. If you want to find out more, get in touch on 0161 532 4752 or book a demo.